Five Star Business Finance, a Chennai-based small business lender, said on March 26 that it has raised $ 234 million in primary and secondary equity and has been valued at $ 1.4 billion, making it India’s fourth unicorn in the world. 2021.
The company said in a statement that the funding round was led by existing investors Sequoia Capital India, Norwest Venture Partners, as well as new investors, namely KKR and TVS Capital. The round included primary equity and a secondary sale of shares by Morgan Stanley Private Equity.
President and Managing Director of Five Star D Lakshmipathy He said: “In our mission to ‘finance the under-funded’, we have created a niche for ourselves by empowering small businesses and the self-employed in every corner of India by providing them with reliable and responsible financing alternatives. Our goal is to achieve this societal goal through grassroots efforts without compromising the pillars of asset quality and profitability that are needed to build a sustainable institution of scale. “
After Digit Insurance, the SaaS Innovaccer firm and the Infra.market business-to-business market, the company is the fourth startup in the country valued at more than $ 1 billion in 2021.
About the loan company
Five Star Business Finance was founded in 1984 by VK Ramanathan. At the time, the company’s operations were focused on consumer and auto loans. Later, Ramanathan handed control of the business over to a relative, D Lakshmipathy. In 2005, the company shifted its focus to small and medium-sized enterprises (SMEs), helping it grow faster. Until 2004, it had a loan book of less than Rs 1 crore, which grew to Rs 100 crore in 2012. Since 2012, the company has grown 20 times.
Actually, Five Star Finance operates 262 branches in eight southern and central states of the country. As of December 31, 2020, the company’s AUM stood at Rs 4,030 crore, and its GNPA stood at 1.29%. For fiscal year 20, Five Star reported a net profit of Rs 261.9 crore on a total income of Rs 787.3 crore compared to a net profit of Rs 156.7 crore on a total income of Rs 408.9 crore for the fiscal year 2019.